Vodacom has initiated a legal challenge at the Constitutional Court, seeking to overturn the Supreme Court of Appeal’s (SCA) decision that mandates compensation for Makate.
The SCA’s ruling, which could potentially require Vodacom to pay Makate a revenue share amounting to R29 billion, is being contested on several grounds. They include allegations of overreach, selective evidence consideration, and the creation of vague orders that Vodacom argues are unenforceable.
The telecom behemoth asserts that the SCA’s judgment, if left unchallenged, could have profound implications. It could impact not only for Vodacom’s operations in South Africa and its group dynamics but also for the country’s appeal as an investment hub.
Despite previous attempts to negotiate a fair settlement with Makate falling through, Vodacom expresses its continued willingness for dialogue and a resolution that fairly compensates Makate’s contribution to the development of the Please Call Me product.
In February 2022, the Pretoria High Court ruled that Vodacom did not offer Makate enough compensation for his invention.
The court ordered Vodacom to pay Makate 5% of the total voice revenue generated by the product over the past 20 years. This includes interest calculated at 5% per year from 2001 to 2019.
The court also ruled that Makate is entitled to 27% of the daily Please Call Me messages sent as revenue from return calls.
In February 2024, the Supreme Court of Appeal (SCA) in South Africa ruled in favor of Makate, determining that Vodacom must compensate him between 5% and 7.5% of the total voice revenue the Please Call Me feature earned.
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The SCA also ordered Vodacom to make a new offer to Makate based on the assumption that he had an 18-year contract with the company.
Vodacom has lodged an application for leave to appeal the ruling to the Constitutional Court. The firm stated that the SCA orders are “unintelligible, incomprehensible, and vague rendering them incapable of implementation and enforcement”.
The Please Call Me service is a free network service that allows users to send a text message to another user to request a call. The service was proposed by South African Nkosana Makate in 2001 while he was working at Vodacom.
Makate’s idea is to allow users to send a free message to other Vodacom users without using airtime. The service is a communication tool that allows people without airtime to send a prompt to others to make a phone call.
Vodacom’s legal arguments against the SCA’s judgment include claims that it is fundamentally flawed and does not align with legal principles.
Vodacom also claims that the majority judgment overlooks or ignores many of the issues between the parties and their evidence and submissions relating to those issues.
Moreover, Vodacom argues that the SCA orders are unintelligible, incomprehensible, and vague, rendering them incapable of implementation and enforcement.
Vodacom further contends that the ruling, should it be upheld, would be potentially destabilizing to its operations and might sully South Africa’s image as an investment destination.
Additionally, Vodacom categorically disagrees with key aspects of the case, which it claims don’t follow the spirit of the law.
